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Buy, sell, or waffle? How many analysts follow Nokia? Better sit down for this, folks: A total of 65 analysts follow Nokia -- more than follow rival cell-phone makers Apple(NASDAQ:AAPL) and Motorola(NYSE:MOT)combined. Of that group, 37 of them rate Nokia a buy, 19 more say it's a hold, and the last nine call it a sell.

What management says:Late in November, Nokia updated investors on how it sees the worldwide mobile-device market evolving in general, and for Nokia in particular. On the latter, Nokia expects its recently announced alliance with Siemens(NYSE:SI), in the telecom-infrastructure market, to depress operating margins to about 15% over the next couple of years.

In the bigger picture, Nokia thinks that global sales of mobile devices (that's cell phones, Treos, Blackberries, and the like) by unit grew 10% in 2006, to just less than 1 billion devices; it foresees another 15% in volume growth in 2007. The bad news is that Nokia thinks average selling prices (ASPs) for these devices will continue to contract as the industry moves "downmarket" in search of developing-world sales.

What management does:To see why I say "continue to contract," see the table below. Rolling gross margins have shed 350 basis points over the past 18 months. Somehow, the company has managed to contain the damage to its bottom line, however, losing just 50 basis points over the same period of time.

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:Which prompts the question: How is Nokia keeping its operating and net margins so high, relative to its gross? The answer: Strict control over operating costs.

Sales' 21% year-over-year leap in the past six months is a good thing -- but only in part. Much of the additional sales, it seems, came in the form of increased unit sales of lower-margin merchandise. Raw materials, however, have not dropped in price in tandem; as a result, cost of goods sold has outpaced sales gains 26% to 21%. Where Nokia made up the difference was in operating costs, where selling, general, and administrative expenses rose less than 6% in the same period. Even better (perhaps), research-and-development costs rose less than 2%.

Going forward, Nokia aims to cap its R&D costs at no more than 10% of its revenues. On the one hand, that should shore up the firm's operating and net margins. However, on the other, hand -- the one that's trembling -- skimping on R&D threatens to erode the technological advantages that made Nokia No. 1 in world market share. If I might coin a phrase to describe Nokia's dilemma: "Those who would sacrifice R&D in pursuit of profits may wind up with neither."

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I like things that go "boom." Sonic or otherwise, that means I tend to gravitate towards defense and aerospace stocks. But to tell the truth, over the course of a dozen years writing for The Motley Fool, I have covered -- and continue to cover -- everything from retailers to consumer goods stocks, and from tech to banks to insurers as well. Follow me on Twitter or Facebook for the most important developments in defense & aerospace news, and other great stories besides.